Nike, a U.S.-based company with a globally recognized brand name, manufactures athletic shoes in such Asian developing countries as China, Indonesia, and Vietnam using subcontractors, and sells the products in the U.S. and foreign markets. The company has no production facilities in the United States. In each of those Asian countries where Nike has production facilities, the rates of unemployment and underemployment are quite high. The wage rate is very low in those countries by U.S. standards; the hourly wage rate in the manufacturing sector is less than one dollar in each of those countries, compared with about $18 in the United States. In addition, workers in those countries often operate in poor and unhealthy environments and their rights are not well protected. Understandably, Asian host countries are eager to attract foreign investments like NikeĂ˘â‚¬â„˘s to develop their economies and raise the living standards of their citizens. Recently, however, Nike came under worldwide criticism for its practice of hiring workers for such a low payĂ˘â‚¬â€ťĂ˘â‚¬Ĺ“next to nothingĂ˘â‚¬Âť in the words of criticsĂ˘â‚¬â€ťand condoning poor working conditions in host countries. Evaluate and discuss various ethical as well as economic ramifications of NikeĂ˘â‚¬â„˘s decision to invest in those Asian countries.
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